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JAKE TAPPER, CNN ANCHOR: You think the Iranians are nervously watching television and saying, what's all this talk about a nuclear option?

I'm Jake Tapper. This is THE LEAD.

The politics lead, Senate Democrats hitting the red button, stripping Republicans of one of their most powerful weapons in the Senate. Will the Democrats live to regret it?

The world lead, Iran looking at a nuclear option of a much more literal sort today. Secretary of State John Kerry claiming a deal is close to roll back Iran's nuclear program, but we have been hearing that for weeks.

Also in politics, I must be slipping. We're almost a full minute into the show and I haven't mentioned Chris Christie's 2016 prospects yet. The New Jersey governor becomes the boss of bosses, today taking over a key leadership role that can only increase his profile and power.

Good afternoon, everyone. I'm Jake Tapper. Welcome to THE LEAD.

We're coming to you live from Capitol Hill here in Washington, D.C.

I want to get to the big news of the day, Senate Democrats invoking the so-called nuclear option.

But, first, it's also a significant day on Wall Street. Let's quickly go to Alison Kosik on the New York Stock Exchange.

Alison, the markets just closed. What's the big news?

ALISON KOSIK, CNN CORRESPONDENT: A big milestone, Jake, for the Dow.

The Dow not just hitting 16000 for the first time ever, but crossing over it, closing at 16010. Many are pinning this on more signs of an improving labor market. We got a jobless claims report today showing that the number of people filing for unemployment claims fell by 21,000 last week to 323,000. Also, factor in earnings. It's still earnings season and earnings continue to be generally upbeat.

Two-thirds of S&P 500 companies have beat estimates in the third quarter so far and also there have been a few days of losses in the market itself, so this is also a natural drift higher. You have seen this recent rally, and it's really been running. The bulls have been running. In fact, today is the Dow's 40th record high this year, 40th. It's up more than 20 percent this year. It's really an amazing return. You see just how the Dow has been rising all year. It hit 14000, it hit 15000 and now 16000, Jake, all in one year -- Jake.

TAPPER: Alison Kosik, thank you so much. Let's hope there's no bubble there and let's hope that some of the numbers on the stock exchange start pointing towards more jobs out in the rest of the country.

Now let's turn to the big political story on Capitol Hill today. We're now living in the aftermath of a nuclear strike, metaphorically speaking, of course. In the politics lead, Senate Democrats really did it. They changed the rules so now it only takes a simple majority vote of 51 to break a filibuster on executive and judicial rules, instead of 60 votes under the old rules. It's been referred to as the nuclear option.

And it went something like this on the Senate floor, Democrats pulling a Strangelove out of frustration over Republicans blocking President Obama's nominees to an unprecedented degree. But today's action did not require both parties turning the launch keys. President Obama today applauded the move, claiming that the obstructionism from the other side has gotten so bad there was little choice.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Today's pattern of obstruction, it just isn't normal. I support the step a majority of senators today took to change the way that Washington is doing business.

(END VIDEO CLIP)

TAPPER: Hmm. That's interesting. You know who might not agree with President Obama? Senator Obama in 2005, when the Republicans were trying to do the same thing as the majority power party, to push George W. Bush's nominees through. Back, of course, then, it was pronounced "nucular" option. Here's what the president said about that in 2005.

(BEGIN VIDEO CLIP)

OBAMA: But if the right of free and open debate is taken away from the minority party and the millions of Americans who ask us to be their voice, I fear that the already partisan atmosphere in Washington will be poisoned to the point where no one will be able to agree on anything.

(END VIDEO CLIP)

TAPPER: Republicans obviously today are furious about this rule change that takes away one of the most powerful weapons in the Senate for the minority party. Senate Minority Leader Mitch McConnell today reminded his Democratic colleagues that they might not like this rule change so much if they find themselves in the minority in the future. (BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: Rather than learn from past precedents on judicial nominations that they themselves set, Democrats now want to set another one. I have no doubt that, if they do, they will come to regret that one as well.

(END VIDEO CLIP)

TAPPER: You who might disagree with, Senator McConnell? Senator McConnell, back in 2005. Back then, he thought it was a swell idea since his party was in the majority and was sick of Democratic obstructionism.

(BEGIN VIDEO CLIP)

MCCONNELL: The current Senate majority intends to do what the majority in the Senate has often done, to reform Senate procedure by a simple majority vote.

Despite the incredulous protestations of our Democratic colleagues, the Senate has repeatedly adjusted its rules as circumstances dictate.

(END VIDEO CLIP)

TAPPER: Do you like this, where I show a clip from today, and then a clip from 2005 where the person says the exact opposite? I could do this for the whole show. There's no end to the clips of senators contradicting their former stances on the nuclear option ever since control of the Senate shifted in 2007.

There's this story that Jefferson breakfasting with Washington once asked him why he agreed to a Senate when they were setting this whole thing up. "Why did you just now pour that coffee into your saucer before drinking it?" Washington asked. "To cool it," said Jefferson. "My throat is not made of brass. Even so, we pour our legislation into the senatorial saucer to cool it."

But I was talking to a Democratic senator recently about this very subject, and I used that metaphor. I said, well, isn't this a risk to the cooling saucer? He said, look, the Senate has become frozen. It's not that the coffee is cool. It's frozen. We can't get anything done. The filibusters are so out of control that we have to do this.

And I think to the surprise of many who follow the Senate, because the Senate, because the Senate is full of a lot of traditionalists, they did change. And this is going to change President Obama's legacy almost as much as Obamacare did.

TAPPER: And, Dana, you were here back in 2005 when you heard some of these people making the exact same arguments as their opponents are now making. What changed, if anything, other than control of power?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, that is a question that I asked Harry Reid, the Democratic leader, who also has one of those old clips not even that long ago, even when he was the leader, saying he would never do this.

TAPPER: I told you we could do it the whole show.

(CROSSTALK)

BASH: We could.

And his answer was that things have changed, and that really is the reason why Jeff just said that there are a lot of Senate veterans who are very much opposed to this and he's surprised. I have been, too, just to see the change in the last week. People like Dianne Feinstein and Patrick Leahy, who were adamantly opposed to taking away the minority's rights, because they knew, they have been in the other role, they changed because they said enough is enough.

And that is why you saw the change. Look, Democrats who are now in the majority have been very candid, saying, we get it. We are going to be in the minority one day. We are going to be in the position where we are going to want to filibuster, and we're not going to be able to do it. But they are arguing that they have no choice.

Obstructionism is so bad that it can't get any worse than it is now.

TAPPER: And, Jeff, just do a fact-check for us. How much is it -- how worse is it now than it was under President Bush or President Clinton?

TOOBIN: It's worse. I thought the most striking statistic that Harry Reid used today was one-half of all the judicial filibusters in the history of the United States have taken place during Barack Obama's presidency.

That's a lot of filibusters. President Obama has had five nominees to the D.C. Circuit, the second most important court in the country. Four of those have been filibustered. Three are likely now to be confirmed as a result of this rules change. But the degree of the use of filibusters has changed. Did the Democrats use it? Absolutely, when President Bush was in office. But Republicans have used it a lot more.

TAPPER: And, Dana, very quickly, I interviewed Senator Grassley, who is one of the Republicans who has been refusing to allow these three judicial nominees be voted on. He says he just wants to reorganize the judiciary. Why not just have a law to reorganize the judiciary, instead of blocking nominees? BASH: If it was just about that, maybe the Democrats would consider engaging in those talks.

But you listen to them today, yesterday about this whole issue, certainly, part of it has been the most recent fight over vacancies on the D.C. Circuit. But it's much broader than that. It's also the call that Reid says he gets from Chuck Hagel from a plane going abroad saying, you have to get me the deputy undersecretary of X, Y or Z, because I need these positions filled and they're not filled. It's much broader than the bench.

TAPPER: All right, Dana Bash, Jeffrey Toobin in New York, thank you so much.

Democrats have had a lot of fun taking jabs at the Tea Party's influence with the GOP, often questioning how a bunch of newbies could have so much control over the establishment. But, today, Republican Senator John McCain is asking the same question about his Democratic counterparts who he says let rookies run the show in this filibuster debate.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: They are governed by these hard-over newer members of the Democratic senators who have never been in a minority who are primarily driving this issue, and they succeeded. They will pay a very, very heavy price for it.

(END VIDEO CLIP)

TAPPER: Interestingly, there are in fact 33 Democratic senators who have no idea what it's like to be in the minority. They were all elected after 2007.

One of them joins me now, Colorado (sic) Senator Mike (sic) Udall.

Senator Udall, can you understand why Republicans see the hypocrisy? I don't have a clip.

REP. TOM UDALL (D), NEW MEXICO: Good to see you.

(CROSSTALK)

UDALL: I don't have a clip of me because I wasn't in the Senate.

TAPPER: Because you weren't in the Senate. But can you understand why Republicans say this is so hypocritical? Democrats were against this tooth and nail in 2005.

UDALL: I can understand it, but the reality is, is it has been an unprecedented level of obstruction.

I mean, in 2005, they reached a compromise. They put judges on the courts. Here, we had just hit a wall. There was no compromise. They said they weren't going to fill them. They had a bill to abolish the vacancies on the court. This is probably the most important court in the nation, except for the Supreme Court, handling all the administrative rulings, regulatory rulings, major issues that the administration puts out there.

So this -- this -- we reached this unprecedented level of obstruction and so we had to break through this. But I think this is returning to the Constitution. The Constitution has supermajorities in five places, not on advice and consent. That's what we're supposed to do on judges. That's what we're supposed to do on executive nominees.

TAPPER: Right. The Constitution says the House and Senate get to make their own rules when it comes to this sort of thing.

Is Senator McCain right when he says that newbies like yourself and Senator Merkley and others are the ones driving this, Senator Bennet, are the ones pushing this?

UDALL: Nothing happens in the Senate unless every senator signs on.

And, in this case, we had 52 senators who said they were going to opt for changing the rules with regard to these nominees and it happened. And each of them thought it through. We had some very senior senators change positions and say, you know, enough is enough. We have got to change the rules.

TAPPER: Let's just talk philosophy now, when it comes to minority rights. Do you think that the minority should ever be able to block a nominee unless there is some huge problem with that nominee?

Generally speaking, unless there is like with the tower, the John Tower nomination way back when, when there was allegations of malfeasance and the like, do you think the Senate, it's their job to basically just rubber-stamp and let the administration have whoever they want unless there's a glaring, horrific error?

UDALL: Not at all.

And I think what our role is, is to step out there, advise and consent, and if we don't believe the person's qualified, if there's some real serious problem, vote against them. You remember Bork. He wasn't voted -- it wasn't filibustered. He was voted down, 58 votes against him.

People like Scalia, everybody says, oh, well, there are going to be more Scalias. Scalia passed unanimously. Ruth Bader Ginsburg on the Supreme Court passed with just three votes against her, 96-3. So the issue really is advice and consent, not with supermajorities. Right now, we have the tyranny of the minority. And that's what we have taken care of.

TAPPER: OK. This is from Mitch McConnell's office, vast majority of Obama nominees confirmed, almost 1,600. That's a lot of nominees who have been confirmed. That's what Senator McConnell, the minority leader...

(CROSSTALK)

UDALL: You know what the chart I would put up here? I would put up the filibusters since the beginning of the country...

(CROSSTALK)

TAPPER: I will do that from Republican Senator Coats.

UDALL: And 50 percent, 50 percent of them in four-and-a-half years, in four-and-a-half years.

TAPPER: But, still, you can see it's a significant number of nominees have been approved by the Senate.

UDALL: Nominees have been approved, but we have reached a critical point there. There was blockage and we had to break through and overrule the tyranny of the minority.

And, really, this is going to be good for the country. We are going to be able to let the president have his team in place. Any president, Democrat or Republican, is entitled to have their team in place.

TAPPER: Senator Tom Udall, thank you so much for being here. We appreciate it. Good luck to you.

(CROSSTALK)

UDALL: Thank you.

TAPPER: When we come back, we will continue our coverage of the blowup today in Washington. Did Republicans underestimate just how far Democrats would go and what do Republicans do now?

Plus, don't think all this talk of a possible deal with Iran means its supreme leader is softening his stance on Israel. Today, he called Israel a rabid dog. Will that derail a potential deal?

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. I'm Jake Tapper, live on Capitol Hill, where an historic change just took place in the halls of Congress behind me, a changing of the Senate rules. The rules as to how politics is played here.

And while the Democrats didn't exactly flip over the monopoly board in the middle of the game, they did use the weight of their majority to change things in favor of the majority, when it comes to the majority pushing through some types of presidential nominations.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: It's time to change. It's time to change the Senate before this institution becomes obsolete.

(END VIDEO CLIP)

TAPPER: Under the old rules, it took 60 votes to break a filibuster. The new move allows filibusters of most nominees to be stopped with just 51 votes.

Now, Republicans are crying foul.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: I think what we really need is an anti- bullying ordinance in the Senate. I mean, now, we've got a big bully, Harry Reid says he's just going to break the rules and make new rules.

(END VIDEO CLIP)

TAPPER: Senator Dan Coats, Republican of Indiana, joins me now.

Senator, you think this is all a distraction, that the Democrats are just -- they just want to change the subject. What do you mean?

SEN. DAN COATS (R), INDIANA: Well, if I were a Democrat knowing two weeks of going back home in front of the people, I'm not sure they are going to think that the constituents are going to be asking about judge nominations. They're going to be asking awful lot about Obamacare.

TAPPER: But I don't think this changes that. People are still going to be asking about --

COATS: I don't think it does either, but I think they are desperate for something, they call it nuclear war. They want us to push -- send missiles back the other way. We're not going to do that.

What's on the minds of the people is the rollout of this Obamacare and the fear people have of losing their doctor, paying double premiums, not being -- having their policies canceled. That's what's on people's minds. This is purely a distraction.

Now, it's an important distraction from the standpoint that it breaks 225 years of history. This is not what the Founding Fathers envisioned. They wanted the Senate to be a place where things cool down and you could get to consensus. You know, it's advise and consent.

The Democrats have just said, we don't want your advice and we don't want consent. There's no compromise here.

And it's outrageous but we're not going to fall through the trap of getting into war with them on this right now, when the American people are focused on Obamacare and these guys and gals here need to go home and explain -- is this law really the best thing for us?

TAPPER: So I had a chart for your Democratic colleague, Senator Udall. And I got -- I should give credit, the ideas for these charts came from Chris Cillizza of "The Washington Post."

Here's the chart for you, which is -- these are filibusters of executive nominees. These are from People for the American Way, a progressive public interest group. Look at this. Bush, when you were in the Senate in the '80s, Bush is zero. Clinton, nine, Bush, seven, Obama, 27. And projected for his second term, 45.

COATS: First of all, they're not filibusters. People think filibusters, somebody standing on the floor stopping everything for 20 hours while they talk. This is --

TAPPER: I understand. But requiring 60 votes -- requiring 60 votes to proceed to vote on the person. But we're just using the jargon here so people at home understand.

COATS: Well, it's designed for the rights of the minority. Most of the significant majority of Democrats voted for this have never been in the minority.

TAPPER: I get that. But this is -- this is a lot of obstructionism, a lot of blocking of nominees.

COATS: There have been 215 judicial appointments brought before the Senate. Only two have been denied by Republicans.

This is all about nothing. I don't know why they're doing this except to shove it down our throat just like they did Obamacare in 2009-2010. Stick it down your throat, we got the power, you have nothing to say about it. Take it, live with it.

TAPPER: You were ambassador to Germany in 2005 so I didn't have one of these nifty clips of you saying the exact opposite. Will you commit right now that if you guys, if the Republicans take back the Senate, you will return things to the way they were a day ago?

COATS: If I was majority leader or minority leader, I could make that statement. But I'll be one of many who think that this is a sacred power given to members of the Senate so the minority has a say in something. The minority didn't have a say in Obamacare in 2009-2010. Look what's rolled out here. Now, the minority's not going to have a say --

TAPPER: Republicans helped draft that legislation. I don't want to get into a whole thing. Republicans did help draft that legislation even if they didn't vote for it. But be that as it may -- in the Senate they did.

COATS: Well, we tried to put a lot of amendments in that were turned down by the Democrats. Not one Republican voted for that law.

TAPPER: Fair enough.

Now, there's some talk by Republicans that -- well, if we get the majority next year, in 2014, in the midterms, we won't even -- we won't keep it just 51 votes for judicial nominees and for executive nominations. Maybe we'll do it for legislation, too. That would be a step backward as well, right? That would be -- that would be bad.

COATS: Well, it would. I don't think that decision can be made now. First of all, we don't have the majority, in order to make that. We'll see what the 2014 elections bring.

But secondly, I think looking at the tradition of the Senate and the role of the Senate, we need to do the responsible thing.

TAPPER: Before I let you go, I want to get your thoughts on a couple foreign policy questions going on.

Let's just do Iran because I only have a minute. Your thoughts on the potential deal with Iran, lessening some of the sanctions in exchange for concessions from Iran on their nuclear program.

COATS: Look, the administration has it backwards. Iran has been in pursuit of nuclear weapons for nearly a decade. They ought to be the ones to cease first and then we give them some relief on that. Rather than we give you the money first, we give you -- we drop the sanctions or lessen the sanctions first, then we'll trust you to go forward.

You know, we have been through that before with North Korea --

TAPPER: North Korea, right.

COATS: -- in 1994. I was here then. That was supposed to be verified. The North Koreans cheated.

I don't trust the Iranians to do -- honor that result but for sure, they need to take the first step, not us. They're the ones that are pursuing the weapons. They're the ones who are going against all the U.N. resolutions and the world --

TAPPER: You oppose this.

COATS: I absolutely oppose it. I think it's very bad negotiating on our part. Another desperate way to get out of a difficult dilemma and avoid making a hard choice.

TAPPER: Senator Dan Coats of Indiana, thank you so much. We appreciate it. Good luck to you.

When we come back, where does he find the time? Governor Chris Christie adds a new job to his resume, and already he's being asked how it could help him in 2016.

COATS: Plus, an 85-year-old man is grabbed from his plane by North Korean officials and his family has not heard from him since. Why is he being held?

(COMMERCIAL BREAK)

TAPPER: Welcome back to THE LEAD. Live from Capitol Hill, another big political story today.

Is there a Springsteen song that I can use to talk about running the Republican Governors Association? Anyone?

All right. Well, anyway, New Jersey Governor Chris Christie has more to handle now. He's officially taking over as chairman of the Republican Governors Association, a job that's been used in the past as a launching pad for presidential campaigns. He'll be the enforcer in a high profile face nationwide for 36 midterm gubernatorial contests including some in key presidential proving grounds.

CNN political reporter Peter Hamby is at the Republican governors meeting in Scottsdale, Arizona -- Peter.

PETER HAMBY, CNN POLITICAL REPORTER: Jake, as we speak, Republican governors are voting Chris Christie, the New Jersey governor, into the chairmanship of the Republican Governors Association. This is a plum job that will allow Christie to travel the country, campaigning for candidates in advance of a potential 2016 presidential bid. He'll get to go to all the key states that he'd need in presidential year -- Iowa, New Hampshire, Florida, South Carolina, where there are going to be governors races on the ballots. He will get on TV in those key states, he'll be meeting activists in those key states.

And importantly, a ton of cash flows through the RGA. They have $150 million budget for next year. So, Christie is going to be on the phone for some of the party's top donors, the people who will be key players in a presidential year.

Now, Christie dismissed all of this 2016 speculation earlier today in a press conference and said the focus was on 2014. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: We have 36 races. We have 20 incumbent governors up in 2014. And I think any one of us in our individual capacity or many of us as leaders of this organization, on the executive committee, start thinking about 2016 at our own peril but worse, at the peril of our colleagues.

(END VIDEO CLIP)

HAMBY: Now, Christie and his team will not say this, but Christie aggressively campaigned behind the scenes to take over the RGA job because he knows just how big of a deal it is. He even out-muscled Louisiana Governor Bobby Jindal for the post with a round of behind the scenes phone calls to other governors, campaigning for the job.

But it's important to note that chairing the RGA does not translate automatically to the White House. Just ask former RGA chairman Rick Perry and Mitt Romney -- Jake.